Growing a Small Account | Podcast Episode #437

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Hey, I’m Ryan Mallory and this is my Swing Trading the Stock Market podcast. I’m here to teach you how to trade in a complex, ever changing world of finance. Learn what it means to trade profitably and consistently, managing risk, avoiding the pitfalls of trading, and most importantly, to let those winners run wild.

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You can succeed at the stock market and I’m ready to show you how. Hey everybody, this is Ryan Mallory with shareplanner.com’s Swing Trading the Stock Market.

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In today’s episode, we are going to talk about a number of things actually, but the main focus is growing a small account and some of the things that you can do to get ahead.

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And today’s e-mail comes from a feller. He is in college. He’s a sophomore in college trying to learn how to swing trade. He’s giving me a number of questions to answer, and because I don’t use people’s real names on these emails, I don’t want to have it out there where they regret having their full name or whatever out there in the public 10 years from now.

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I give them a Florida redneck name. I’m from Florida, I have a redneck background. So we’re going to call this person Mabel. I actually don’t even know any Mabel’s, but I wish I did. Sounds like somebody that goes by the name Mabel could take you on some pretty fun adventures. But anyways, Mabel writes all right.

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I am currently a sophomore in college and trying to learn swing trading for the past six months. I have $1000 account and I am working on growing it, hopefully making swing trading my full time job later on in life. I’m starting to get the hang of the basics and I have also joined your trading block group.

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Everything inside the discord has helped me out a ton and I’m thankful for the information that is shared by you and many others.

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Are there any other resources you would recommend for beginning traders that would further help their knowledge of the stock market and understand how to be a successful swing trader?

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But since I’m still learning, I have a lot of questions along the way. One of the main struggles I have is creating a watch list.

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Are there any sites you recommend for stock screeners? I know to find stocks that are above $10 and have a high market cap of usually over $500 million,

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but with those filters there still are so many stocks to look through and I was wondering if there are any other ways to narrow it down to look for more promising stocks.

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Another question I had is with the watchlist you create, I see some of the stocks breaking out but I don’t always see you take the trade.

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What things do you look for that makes you decide to take the trade and what are some of the signs that make you avoid the trade even though it broke through the point you were watching to get long

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on? Also, since I have a smaller account, what are your thoughts on leverage or other ways of borrowing money to help grow my account faster?

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I have a part time job that I consistently get paid from so I’m saving each check to slowly put more money into the account as well.

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As of now, I am mainly following your trades and others in the trading block, but I am looking

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forward to becoming more independent and finding trades on my own that I can hopefully share with the group and get other opinions.

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Sorry if anything I said is supposed to be avoided on the podcast and if it is, feel free to leave some of those parts out.

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Thank you, Mabel.

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No, you didn’t say anything wrong.

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I actually don’t really find people saying anything wrong on their emails. I think they’re great questions that that people come up with and always provide the different

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twists on topics that I will assume before I receive the e-mail that I’ve already addressed. And then I get a new emails like, oh, that’s a different twist.

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That’s a different take on it. Let’s, let’s see how we can address that matter because the reality is when it comes to trading,

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everybody has different circumstances. Just like we all look different from each other.

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Our circumstances are different. We have different fingerprints, we have different circumstances.

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Everything about us is different from each other. Yes, there’s some similarities.

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There’s some things that we can learn from each other, but the more scenarios that we can talk about, the more relatable it becomes, the more helpful it is.

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So I’m glad Mabel has written the show and let’s go ahead and start talking about some of these issues here.

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So the first question was, are there any other resources you would recommend for beginning traders to help further their knowledge of the stock market and understand how to become a successful swing trader?

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Now, one of the things that I get a lot of times is what books would you recommend?

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And I wrote a book like, I don’t know, it was 10-11 years ago. I don’t think it’s relevant anymore.

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You don’t see it being marketed on my website. I think it’s, it’s too old and too irrelevant with all the technological changes.

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So definitely wouldn’t recommend the book that I wrote a long time ago. That’s not really relevant, but some that I do like who actually does that unrecommends a book that

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they wrote from a long time ago. I do because I just, I want what you guys learn to be of value to guys.

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One of the things that I think can be valuable, but it’s also very boring, is reading more of your textbook like trading books.

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This is going to be books that don’t have the frills, the excitement, the how to get rich schemes, the, you know, trade these penny stocks this way and you’ll become a millionaire in two weeks.

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There’s plenty of those books out there. There’s these books that act like that.

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They have the secret potion or the Holy Grail to the stock market on how you can always be right on every trade that you take.

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But I’m here to tell you those books don’t work. They don’t.

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I’ve read them. When I started off, I was trying to find as many of them as possible.

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The ones that work the best for me were the ones that put me to sleep more times than not. The ones that sounds bad.

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But some of the ones that I did the best with reading were the ones that I was forced to read when I’m like sitting on the toilet because there’s no other way that I’m going to pick that up in the

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middle of the day and just read it because it is so boring. One of them that’s very boring is technical analysis of the financial markets.

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It is absolutely one of the most boring books you will ever read. But I also think it’s very, very important to read this book because there’s a lot of technical

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patterns. It’s by a guy named John J Murphy, and it’s a lot cheaper than it’s ever been to.

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I think when I bought it at least 15 years ago, I had to have spent well over $100. Now when I go to Amazon, you can find it for $42.00.

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I don’t get compensated for this in any way. I’m not promoting this book.

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There’s nothing that I get for saying this book on on the podcast, but I mention it just because I do think, yes, it is extremely boring, but it’s very informative.

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It’s a very long book and you will fall asleep from time to time reading it, but the amount of information and the knowledge that you’ll gain from it, it’s it’s pretty good.

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There’s very few times that I feel like I have read a book on trading that’s actually benefited me. I would say this is one of those, another one that I read.

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And again, this isn’t something that, you know, I’m being compensated for, but really the books that Alexander Elder writes, and he’s written a bunch of them.

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I think one of the big ones is Trading for a Living. That was probably my favorite one, but his books have also been very helpful because he gets into a

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lot of the psychology of the trade. And in this podcast, I get into a lot of the psychology as well.

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I’m not a psychologist by any means. I don’t have a doctor in front of my name.

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He does, but I don’t I’m I I get into the psychology from how it affects me and how I can see it affects others, but by no means am IA psychologist.

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One of the other things too that I think can really help a new trader, it’s just understanding market relationships.

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You’d be surprised at how many people don’t realize, and I’m, and if you’re one of them, I’m not faulting you for it.

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I mean, I learned it because I studied economics in college, but who knows how long would it take me to understand this if I hadn’t.

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And it’s a pretty simple concept. It’s just the inverse relationship there is between rates and bond prices, between the yield and

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the, and the price that you pay for a bond. People don’t realize that there’s an inverse relationship there.

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Some people don’t realize that there’s sectors that are more prone to be in havens of safety versus other sectors that are more havens for growth and aggressive trading and investing.

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And so understanding the market relationships there is important understanding things that like inverse ETS, if you’re going to trade them, there is a time decay element to them.

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And so you don’t want to make a long term investment in the inverse ETFs because there’s a very good chance that that will come back to haunt you.

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So those are just a few things. Is that the all-encompassing list of books and things to help a new trader?

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No, but that’s a good start. And there’s a lot of other questions to get to as well.

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So I don’t want to spend all my time just focused on that. The second question that this person had is, are there any good screeners that you’d recommend?

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I use my screeners on TC2000 and TC2000 is a little bit more on the expensive side. You have to be really, really serious, you know, and and dedicated to your trading because it is a

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much more expensive. I think it’s the best charting software out there.

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Do I necessarily think it’s the best screening platform? I think it’s one of the best.

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I don’t think it’s the best. Trendspider has another really good platform as well.

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They focus a lot on the the screens too and you can do back test as well. But if you’re looking for something that’s free because you’re trading with $1000 budget, I would

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probably say something like Fenviz. Fenviz yes, they have, they have a premium version as well, but I mean, they’re free one you can do

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a lot of scans on it for. And so I think like what this person is doing here, they’re, you know, at least screen for stocks

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above $10 and with the market cap over 500 million. But like what Mabel says here, there’s just tons and tons of results.

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For me, I don’t mind going through tons of results because in the end, watch lists are meant to filter out results and preferably it’s about filtering out results you don’t want to even consider.

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So if I was doing a scan first, let’s say something simple like a bull flag, I wouldn’t want something that has a bear flag in it.

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I wouldn’t want something in it that has no bull flag in it. That’s probably another way to put it.

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You would want it to just give you results of bull flags. Now that when it’s filtering out all of those stocks that are not a bull flag nature, there’s still

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maybe some good results in there that’s providing you with a different opportunity in the current market environment, but you’re not going to see that because you’re filtering out.

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So for me, I would prefer to go through 5 or 600 charts. To me, it’s not that big of a deal.

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But I also do this full time. So for me it’s worth my while.

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I want to see more. I want to be able to throw away.

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The ones that I don’t want to show up in my scans are the ones that I don’t want to see under any circumstance.

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That would be the stocks that are under $10. I have no use for those.

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I don’t want to be trading micro cap stocks or most of your small cap stocks. I really want to be able to trade stocks that have a have a market cap of a billion dollars or more.

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That tends to be my floor.

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But charting is work. Technical analysis is work.

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So in the end, there is a consuming time nature about going through the charts, the more you go through charts.

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But I’ve probably looked at millions of charts. I mean, I can’t imagine it being less than that.

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The number of charts I go through a single day is well over 1000, so I can’t imagine it not being anything short of just millions of charts that I’ve gone through.

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Because I’ve gone through millions of charts. Every time I look at a chart, I’m gaining more information, whether I realize it or not.

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But I’m learning. I’m processing things faster and faster.

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I can go through charts in seconds, maybe even less than a second at times. And so almost to a certain degree, and I’m not trying to necessarily brag about myself here, but I’m

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trying to use it as an example for how the more time you spend looking at the charts, the faster you’re going to be able to process this charts.

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So for me, looking at the charts is almost like a form of scanning for or a screening. I’m like my own built in Screener.

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I can go to the charts fast. I’m not computer speed, obviously, but I can go through them pretty fast.

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And so I don’t feel the need to necessarily weed out a ton of stocks because I don’t mind going through 1000 charts.

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I really don’t. So there’s going to be a time element that’s involved and really the more exposure you have to

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charts in the beginning, whether it’s charts that you want to see or not want to see, the better off you’re going to be.

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Now, I can understand putting in the elements of stocks that you don’t absolutely want to trade, but if you’re in, you end up getting like 500 charts that you have to go through or even like a few 100

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charts. I don’t think that’s the worst thing in the world because you’re getting exposure to a lot of charts

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and the more exposure you get to charts, the better off you’ll be. It’s kind of like going back into the the the old days of when I had a Nintendo as a kid, I was

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playing Mike Tyson’s Punch Out and there was a code that could take you straight to Mike Tyson and I wouldn’t have to fight all those other boxers.

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In fact, I remember the code too is 0073735963. And no, I did not look that up at all.

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I can still remember that as a kid. I could type it in fast, but ultimately what happened was every time I went to Mike Tyson without

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fighting all those other fighters, he’d knocked me right on my butt. I couldn’t beat him, but I stood a much better chance when I, you know, went through Glass Joe and,

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and through the Sandman and through Soda Popinski and fought all those fighters that progressively got harder and harder and harder.

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And then when I got to Mike Tyson, my reactions were faster, my processing was faster. I may not have beaten them the first time, second time or third time, but eventually, because I

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fought all those other fighters, I got better at the game. And so it’s kind of like that with charting.

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You don’t want to skip the levels. You want to get as much exposure to charts as you can.

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Even if they’re charts you’re never going to trade. Still good to look at them.

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Another thing that’s good to look at is swingtradingthestockmarket.com. Yes, that is the website that goes alongside of this podcast that’s going to give you all of my

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stock market research each and every day. That’s going to be daily watch lists, the trades that I’m looking to potentially take.

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Plus I do a review on the watch list every day. So you know, closer to the end of the day, I’m looking at the charts and going over them via video

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format and telling you what I liked or what I did not like about the trade setups and how they panned out.

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Plus, I’m going to give you mega cap updates via video throughout the week. I’ve added a new stock to that list being Eli Lilly and I’m going to give you stock market updates

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as well. Plus at the beginning of each week, my master bullish embarrassed watch list.

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So check that out swingtradingthestockmarket.com. That’ll take you to my main website, Share Planner and you’ll be able to choose which plan works

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best for you. The third question, and we’ve kind of answered this already and that was, is there any other way to

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narrow your scans down to look for more promising traits? And yes, if there’s, if there’s a parameter that you like, and I can’t really say like, OK, use this

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parameter because that parameter doesn’t work for everybody’s style of trading. So I’m not going to get specific parameters out, but just remember, when you are inserting

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parameters into your screeners, you’re reducing the noise. The more parameters, the more if you put too many parameters and you’re not going to have any

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noise because you won’t have any results. So it comes down to what you’re looking for.

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If you’re looking for stocks, they’re trading above their twenty day moving average. Then when you put that parameter in, you’re not going to get any stocks that are trading below their

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twenty day moving average. So it’s really about what you’re looking for in the parameters that you want and the

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screeners are getting much more fancy. You can go for chart patterns.

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So one of the things I would say too is, is that be aware of the market conditions that you’re in. From July 16th to the August 5th,

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we had a significant sell off at that point in time. If you think that we’re looking for a bounce, you want to see or scan for stocks that you think

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might be trading at critical support levels, maybe that’s a 200 day moving average or A50 day moving average or a key price level.

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You want to scan for those kinds of stocks. If we’re in a market that’s continuing to grow and make new all time highs, then maybe you’re

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looking for a continuation plays like a bull flag or a continuation triangle. So really you have to be flexible and how you’re scanning for stocks.

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And that takes me to the next question is why do I have some trade setups out there that I don’t always take?

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And that’s a question that’s not too hard or difficult to answer. And that is it depends on the market conditions.

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So there can be long setups that I’m looking at, but if the markets falling apart because I use a top down trading strategy where I want the overall market direction to be in alignment with the

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sector and the industry. If the markets falling apart but the stock setting up, I’m not going to take a long setup.

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It’s because I’m fighting against the tides there. I’m not going to try to get into a trade and think that it’s going to be profitable when the

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market’s dropping at 100 points in a single day. No, that’s going to be a hard one to win because more than likely if it’s breaking out, there’s

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going to be a strong head fake or a reversal there. And I don’t want to be caught in that.

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There’s other times to where, OK, if we have a stock that’s breaking out at 1:50 PM Eastern Time and we have the FOMC coming out at 2:00 PM, I might hold off just because I don’t want to get into a

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trade right before the volatility starts to skyrocket. And I have no real clear edge for trading it at that point in time when there’s such a high risk

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market event that’s right around the corner. So I may hold off on those as well.

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And sometimes too it can come down to do I have too much exposure in that area. I may already have an industrial stock in My Portfolio.

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And one of the things that I always find that’s easy to do is get top heavy on tech stocks. So if I have a software and a semiconductor stock and maybe even electronic stock, what I probably

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am not looking to do is add another tech stock or a semiconductor play. So sometimes you can just have too much exposure already.

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And the final question, and I think this is an important one and one that a lot of young traders or new traders to the new traders to the market grapple with is, is there any other ways via leverage

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or borrowing money to help grow my account faster? And I would say no, don’t do that stuff because that’s the stuff that’ll get you in trouble.

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Because if you get, you know, a prop firm, which I think almost every one of them are scams. If you get into a prop firm and let’s say it’s not a scam, let’s say this is an honest prop firm,

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OK, fine, they’re giving you 20 to one leverage. Guess what?

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You’re going to blow out your account probably under a week. It’s just not likely to work out in your favor.

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What you’re better off doing is it doing exactly what you’re doing. I think you are already doing the right thing and that is saving up money, putting money aside from

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your paychecks and building on it. You’re in an incredible opportunity right now having only traded for six months to learn without

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making life changing mistakes. There’s people out there.

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I just read about somebody who inherited like $800,000. This was on a Wall Street Bets message board.

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Whether it’s completely true or not, I don’t know, but it’s worth telling the story because this kind of stuff does happen.

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They inherited $800,000. Their young, young kids, their grandfather died, left them 800,000.

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They go and put all that money on Intel INTC. Next day INTC comes out.

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They’ve got horrible earnings. They’re putting 19,000 people in their workforce.

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The stock plummets. I mean, I think it went down like 25–26%, had its worst day since 1974 I believe it was.

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So this person just completely lost it. Now, if this person was trading with a smaller account, but it still stunk.

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You know, if it was a $200.00 trade where you lost 40 or 50 bucks, yeah, that would still stink.

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But it’s not life changing. Losing 2 or $300,000 because of a bad trade, that’s life changing.

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And it could still get worse. So the point of all of this is don’t try to accelerate your growth.

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You know, as kids, when we’re 10/11/12 and our parents tell us something that we don’t want to hear, we’re like, I can’t wait till I grow up and I can make my own decisions.

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But what they don’t realize often times is that they’re living in the best times of their life. When you’re in high school, you say, man, I can’t wait till I grow up and I can get out of high

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school and not have to do homework anymore and I can have my own house and have my own car and go where I want to not have to ask for permission.

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And I know some people have some pretty horrendous childhoods. I’m not discounting that at all.

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But for those who have good ones, it’s easy to look past it. And I would encourage Mabel here in the early stages of their trading to embrace the fact that

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you’re learning still to enjoy it because especially being a sophomore in college, you’re going to be a sponge.

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Like there’s no, there’s no rush right now. To have to be trading $100,000 trades, there’s no rush whatsoever.

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So embrace it. Embrace the learning, embrace the fact that you can make bad mistakes and not be impacted by it for

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the rest of your life. I remember when I was trading with a couple $1000 and I made made some stupid plays around earnings

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time and I was down like 20–30% in four different stocks. Yes, all in one day from earnings.

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I thought, how am I ever going to financially recover from it? Now I look back and kind of laugh.

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I was like, I’m glad that that was just $1000 account I was making stupid mistakes with and not a $10 million account or a 20 or even A2 or $300,000 account or a $50,000 account because then it’s

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much harder to come back from those kinds of mistakes.

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If you enjoyed this podcast, I would encourage you to leave me a 5 star review on whatever platform you’re listening to me on.

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Go to swingtradeinthe-stockmarket.com.

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Make sure to check out those plans there and support the podcast. And on top of all of that, send me your questions, send me your emails.

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I want to hear from you guys the problems that you guys deal with incur on a daily basis. I want to help you guys get better and this podcast has been, I know it’s been a lot of value for a

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lot of you guys, but it’s also been a value to me because it’s I feel like I’m, I’m giving back a lot of what I’ve learned over the years and hopefully helping you guys avoid some of the

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pitfalls that I’ve had to experience. So send me your questions, send me your stories.

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I’m not going to tell your name. I’m the only person that reads those emails.

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Thank you guys. God bless.

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Thanks for listening to my podcast, Swing Trading the Stock Market. I’d like to encourage you to join me in the SharePlanner Trading Block where I navigate the stock

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You have any questions, please feel free to e-mail me at ryan@shareplanner.com. All the best to you and I look forward to trading with you soon.